A Week Of Oil Prices! But The Most Dangerous Moment Is A Month Later.

The demand for crude oil has been greatly reduced, and dozens of tankers have been docked in the waters of California, the United States.

Recently, the video released by the US Coast Guard on social media shows that about 30 tankers in the waters near California have been anchored, and the tankers with more than 20 million barrels of crude oil have nowhere to go, and can only be anchored in the waters between Long Beach and San Francisco Bay.

Oil price "push ups" shock market or become a new normal

The tanker floating on the sea is also a microcosm of the unprecedented and volatile market in the crude oil market this week. This week, the oil futures market experienced a thrilling upheaval. WTI crude oil futures and London Brent crude oil futures plummeted at the beginning of the week. WTI crude oil futures first reported negative value in 20 days, while London Brent crude futures in June fell to its lowest level since June 1999 on the 22 day. However, oil prices continued to rebound, which rose on Friday.

What is the reason for the abnormal fluctuation of international oil prices this week? It is also necessary to talk about a meeting more than a month ago. On Friday, March 6th, in order to cope with the decline in crude oil demand caused by the new crown epidemic in Vienna, OPEC and OPEC, the OPEC led OPEC, cut talks with Russia's Ministerial Conference on non OPEC production. Saudi Arabia took immediate retaliatory actions to announce price increases. On Monday, March 9th, Brent crude oil futures fell to $31.02 a barrel, or 31.5%. In the following week, international oil prices experienced the biggest weekly decline since the Gulf War in 1991, and oil prices were chopped down and panic spread.

Robert Johnston, director of energy and natural resources of Eurasia Group: I think the current situation in the oil market will continue for some time. At least two to three months, Russia will not compromise easily. But we do not think it will last for too long. It will be too costly for the parties. We should see them return to the negotiating table.

After the oil price war lasted for more than a month, OPEC in April 12th announced that it had reached an agreement with non OPEC oil producers to cut oil production by 9 million 700 thousand barrels per day from May 1st, and the first round of production cuts lasted for two months.

The scale of production is still the largest in OPEC's history, which is almost 13% of the world's total output, so it has played a certain role in boosting oil prices, but many uncertainties remain. After the announcement, oil prices were volatile and WTI oil prices surged to 9%.

But after a brief rise, crude oil prices collapsed. Beginning in the evening of April 19th, the us light crude oil WTI May contract price fell all the way, breaking through the people's cognitive limit, 11 US dollars, 5 US dollars, 1 dollars, -1 dollars, -40 dollars...... Eventually dropped to -37.63 U.S. dollars / barrel at the closing price, or more than 300%, and "down payment" crude oil futures came out.

Shi Deming, chief executive of wealth management at UBS, The main reason for the fall in oil prices was that futures moved from May to futures in June, of which technical adjustment led to a fall in oil prices.

Analysts believe that the speculative structure of New York crude oil futures investors caused a large number of contracts to panic before the maturity date, which is an important reason for the negative value of international oil prices. Because speculators of crude oil futures do not have the ability and need to store crude oil, these speculators are forced to liquidate futures contracts at negative prices when the New York crude oil May contract expires in April 21st.

If Guan Qingyou, Dean of the Financial Research Institute, said that the physical delivery of the United States in Cushing, Oklahoma, this negative oil price must mean that Cushing's library was basically full, there was no place to put it out, it had to be cleared out, and transportation would be very intense.

However, at present, international oil prices have risen from a low point. International oil prices rose sharply on the 22 day as market sentiment rose and the demand for safe haven was reversed.

Crude oil storage capacity is in jeopardy, exhausted in three months.

CCTV financial and economic information broadcast column video

Although oil prices have rebounded in recent days, worries about oversupply still linger. According to the analysis, under the background of the global spread of the new crown pneumonia epidemic, the scarcity of world crude oil demand led to a serious surplus of crude oil supply, which is the fundamental reason for the negative oil price. It is imperative that the crude oil that has been exploited has no place to store.

OPEC's latest monthly report shows that global demand for crude oil in 2020 is down 6 million 900 thousand barrels per day, and crude demand will drop to its lowest level in 30 years. The research data of Japan's Energy Economics Research Institute is more pessimistic. Japan's energy economy predicts that the global blockade of the second quarter will reduce oil demand by 18 million 100 thousand barrels per day.

Liu Zhaoquan, vice president of China Petroleum Group Economic and Technological Research Institute: The demand for oil in Asia is down by 2 million 800 thousand barrels per day. In North America and Europe, it has a relatively high degree of industrialization, and its car ownership is relatively large. As a result, the decline in oil demand caused by the closure of the city is even greater. In the two quarter, oil demand in North America is expected to drop by 5 million 700 thousand barrels per day and Europe by 5 million barrels per day.

Not only is the oil demand slump, but there is not much left in the global oil storage space, and storage demand is an indispensable part of the global energy supply chain, which is at its highest level for many years. From Singapore to Cushing, Oklahoma, oil tanks are filled with crude oil and other products, the most important of which is Fujairah, the United Arab Emirates, where there are transport corridors in the world's highest oil producing areas and oil stored in the Middle East market. Recently, Fujairah petroleum terminal business manager said that there is no room to store excess oil.

Guo Haitao, an associate professor at the school of economics and management, China University of Petroleum, said that Fujairah, the UAE, is already at full load and basically no longer receives new oil storage requests, because this is the largest oil storage center in the Middle East, and the Middle East storage capacity has basically reached its limit, and inventories have not increased elasticity.

The Middle East's oil storage capacity is not optimistic. The world's largest oil producer, the United States, is also running out of strategic oil reserve base. According to Reuters, the energy storage base of the DOE's strategic oil reserve base can store up to 713 million 500 thousand barrels of crude oil, and has now reserved about 640 million barrels of crude oil.

US President Trump: We will fill up the US national crude oil reserve, that is, strategic crude oil reserve. We will buy up to 75 million barrels of crude oil at most. The storage space of strategic crude oil reserve will be full. This has not happened for a long time.

The S & P estimates that the remaining storage capacity of the global crude oil and other energy resources is 1 billion 400 million barrels, of which: the land residual storage capacity is about 1 billion barrels, and the remaining capacity of the sea is about 400 million barrels. Even considering OPEC's full production reduction, these storage space will be exhausted in 2-3 months.

Crude oil demand slump, oil prices will continue to slump

CCTV financial and economic information broadcast column video

The sharp fluctuations of crude oil prices add to the worsening world economy. Where is the bottom of the oil price?

In order to curb the continued decline in oil prices, after Saudi Arabia and Russia's mediation in production, in April 12th, OPEC issued a statement declaring the largest production reduction agreement ever made. The reduction process is divided into three steps:

The first step: in May 2020 -6 production decreased by 9 million 700 thousand barrels per day, the largest scale of historical production reduction.

The second step: July 2020 -12 month reduction of 7 million 700 thousand barrels / day.

The third step: in January 2021 -2022, the production decreased by 5 million 800 thousand barrels per day in April.

Liu Zhaoquan, vice president of China Petroleum Group Economic and Technological Research Institute, said that even in the implementation of production cuts, prices are still difficult to play a role in boosting. But many agencies predict that the current intensity of production cuts is still unable to effectively hedge the demand decline caused by the epidemic. According to the IEA estimates, global oil inventories are expected to increase by 15 million barrels per day in the two quarter, even if the supply side is reduced by 10 million barrels per day.

Considering that the global crude oil storage capacity may run out in 6-7 months, crude oil prices will take a big test. Due to the unoptimistic economic outlook and the sluggish demand for crude oil, many foreign institutions expect future oil prices to be more uncertain and even negative. Oil prices are expected to remain low until production falls to offset the decline in demand.

Han Xiaoping, chief information officer of China Energy Network At the bottom of the speculation, there will be a negative 40 US dollar, and the bottom of the demand is actually more accurate than that of Beihai's Brent oil price, which is between twenty and twenty-five US dollars.

Guo Haitao, an associate professor of economics and management at China University of Petroleum, said that the price of crude oil is expected to be up and down at $20, which will vibrate at such a level, which will last until the end of June and even the beginning of July.